November PCE, 12-23-2021

 

The Commerce Department released the latest CPE information. This concludes the inflation information that I track... for the month of November. 5.7% PCE; PCE EX-F&E at 4.7% and trimmed mean PCE at 3.5%. All numbers are above October data.

There is really no surprise, and the latest numbers simply affirm what is already widely known, so has been rather mildly reported. Especially the relationship between PCE and the Federal Reserve's reliance on that information.

The FED has already mentioned what they might do, but haven't done anything, other than reducing bond buying... which is the key point. 

As for me, the MPI is my gauge and I suspect it will go up for the December report to about 5.1% annual and 0.4% on the month.

Forecasts for CPI-U range from -0.3% to +0.4% for December and year to year between 6.7% and 7.1%. I suspect we are nearing the end of peak y/y numbers and should look closer at month to month in the upcoming reports.

OMICRON

Omicron is spreading very fast, according to news and data sites. While it appears to be much less severe than previous covid variants, the current CDC protocols for medical staff is quarantining for 7 days from testing positive from covid... any covid, mild or not. Considering how pervasive the omicron variant is, and the apparent weakness of vaccines and prior covid immunity are to the omicron variant, the likelihood of much higher infection rates exists. This would include the medical community.

As with any virus, certain portions of the population are more susceptible to serious illness and death and would require medical attention. Medical attention that might be restricted by its own members infections and requirement to quarantine.

The timing for getting sick and seeking medical attention might not be as good as current. Then think about all the various companies, schools, etc. that require testing and adhering to various protocols. Think about the grocery stores that look warily on employees sniffling and sneezing. 

Just sayin..

Odd and interesting things found on the internet.

My reading list needs to be trimmed...

One website had a thread complaining about what to do with a narcissist. There were multiple people weighing in with advice... (narcissists?)

Clearly some threads are simply a mundane idea that has popped into someone's head. (Narcissism?)

Multiple threads purporting to be about facts, that degenerate into myths and urban legends. Is it intentional?

In that same theme... Quotes of the day, which should be relabeled as MIS-quotes of the day.

Some folks, apparently, prefer to ask questions on social media about their medications, which could be obtained by reading the literature that is already available. Reading is reading... smh!

Ran across a piece regarding Fruitcakes! No, not us internet denizens but rather the actual fruitcake... The magnificent history of the maligned and misunderstood fruitcake. For me it was a fun read and not my usual material. But education comes in all forms. 

A few thoughts on Omicron. It was first detected in South Africa, where several cases were among 35~39 years of age and the symptoms were mild. Sounds good, but I wondered about some of the other statements. 

While South Africa has a poor vaccination rate, the general belief is the rest of the population has probably had covid. Which led me to wonder why their death rate was ranked 55th in the world. Turns out they have an average age of 27 and only 5.5% of the population is above 60, which seem to be the prime age group for severe cases and deaths. When adjusting the death rate to the USA's 16.5% of population in that age group... the ranking might be closer to #2, just behind Peru.

There is also the matter of cases being "mild" among that 35~39-year-old age group already infected. What is mild? Would the older age groups also be mild? IF South Africa is either vaccinated or had covid, then Omicron can overcome the vaccine and/or immunity from previous infection. 

A lot more questions, than answers at this point. In any case, I am certainly maintaining the hermit lifestyle I have adopted. I do wonder about the almost guaranteed potential wave of cases upon the working folks and how that might impact industry output, etc. 

Even with hermit lifestyle, I cannot avoid such impacts and need to prepare quickly... on top of might current preparations. 

And yes, I will likely pay more as inflation is going to continue the upward trend. I lot of folks are saying this and that about the FED, and the Fed has been banging the drums. Yet the FED has done nothing and clearly is waiting on inflation to taper, prior to doing anything meaningful, imo. Also in my opinion, the FED is at least 6 months behind on tightening and possibly 9+ months. Tightening should be done when growth is heating up, not when it begins to slow, and I think that will likely start at the first of the year. 

I might be wrong and certainly hope I am, but it seems the "good" news has to be viewed as suspect, much like the "bad" news. 

Finally, there is the "logic" being used. According to one internet sleuth, "we have tried masking, vaccinations, shutdowns, and social distancing... and none of it has worked, so anyone with basic logic skills should recognize none of it is working and should be ignored." 

It is sad that something akin to this is passed of as a logical deduction! It's a sad world that accepts this type of irrational thinking.

We have tried to get people to mask universally, but with limited success and strong resistance; we have tried to fully vaccinate people, but with very limited success; We have tried shutdowns in some areas, but only for short periods and thus with very limited success; and finally... social distancing was never really practiced in most places. So, to form some logical conclusion from any of this is rather idiotic. 

But we see evidence every day, as to how irrational the world has become. That is the sad reality.

Is My Attempt at Hoarding Merely Transitory?

 

It depends on definitions. An individual's life is transitory, in the grand scheme of things.

This term cropped up regarding inflation and it may or may not be transitory, but what about my hoarding habits, due to covid? I realize that Jerome Powell has said it might be time to retire the term "transitory". Seems like an admission that someone was wrong, when first describing inflation as merely transitory. Which begs the question of how much else might be wrong? Oh well, back to my situation.

Shortages early in the Pandemic caused me to add shelves inside the house; stuff the pantry full and then those added shelves being packed. It took a while to get that done but was largely completed in August 2020. At that time, it became just a matter of maintaining the stash. 

Since then, there has been limited contact with people and mostly visits to healthcare settings, etc. This has become normal, and I don't seem to have a problem with the lifestyle. In fact, discovering the many "curbside" opportunities have led me to the conclusion that I can get by quite nicely.

Having established the "stash" of goods, worry over shortages have abated. Granted, there are items each week that are marked "unavailable", but generally within a couple of weeks... they become available. The stash covers that, except for "perishables" which at times is hit or miss. Doing curbside from 2 different stores each week, reduces that as well.

Periodically, I try to evaluate the hoarded goods and estimate long term needs. Generally, this means looking at the world of covid, which currently looks dicey, even with double doses and boosters. 

Which brings me to discuss this Omicron variant. A lot seems to be missing regarding knowledge of this variant. I feel confident our own personal lifestyle should keep us safe from these variants. These variants will likely continue for quite a while as new types of vaccines will likely need to be developed and the lag time between development and sufficient global uptake to slow the rate of mutations... seems to be out of reach.

I would suspect the "supply chain" crisis will be alleviated in the spring, but that does not necessarily mean everything will be readily available, especially in the food area. When I refer to supply chain crisis, I am referring to the piles of goods at our ports, intermodal congestion, etc. We still have the issue of countries closing borders, the flow of goods, etc. You can't really have port congestion if there is no cargo coming in. 

Inflation will likely continue to be a factor, well into 2022, imo. I can almost guarantee the CPI for November will be at 40-year highs and December might ease a bit from the November numbers, as energy seems to be plateauing. However, nothing else seems to be easing, although it may well be the October retail sales, which were stellar and might just be people ordering Holiday "stuff" early... to avoid any potential shortages. That might explain the less than stellar sales of the past Thanksgiving weekend.

Food does not seem to be catching a break and given the disruption to meat packers, etc. due to covid; disruption to farmers worldwide, due to weather and covid, it would seem to indicate no immediate relief in the inflation trajectory. 

While most of our food supplies are of North American origin and would seemingly be safe from issues overseas, etc., the packaging materials, equipment, and replacement parts of equipment used in the food sector are not so safe, imo. 

Just as many industries are moving from the just-in-time model to the just-in-case model, it seems imperative that I consider that as well... which I did but need to continue.

I cannot say when I will ease off the hoarding or if I ever will. There are certain benefits to knowing I have enough to overcome most issues. So, renewing my zeal for hoarding and maintaining the current stockpile will continue and perhaps I will consider expanding, although the latter is much less likely.

Everything stated to this point is about unknowns, regarding inflation and supplies, but another worry and also unknown as well... is breakdown of societal norms, via social upheaval and in case anyone has forgotten... 2022 is an election year for all of Congress and 1/3 of the Senate. By the way... vaccine hesitancy will likely become a bigger issue, the Supreme Court is weighing in on some "hot" topics and people are generally in a bad mood over just about anything you can imagine. Some people are mad at other people because the other people are mad and it escalates from there. 

Outbreaks of the past have seen public trust eroded and with it... a breakdown in societal norms. The Spanish Flu saw some of these societal issues regarding trust in authority figures and the Black Plague was catastrophic.

Trust in leadership had been waning pre-pandemic and multiple factors not directly related to Covid... has eroded the trust even more. 

History indicates that breakdowns in society are not merely transitory, in that it requires changes over may years to achieve a new normalcy. Transitory might mean a lifetime.